Top 10 Key Functions of Human Resource Management

17-Jul-2024

Effective human resource management is a critical component in today's organizational landscape, where organizations are driven by breakneck competition. While it was designated the task of recruiting talents in the earlier years, in the current times, the roles and significance of HRM have evolved. Today, human resources management is an indispensable strategy for managing the organizational internal structure and workforce, aimed at incorporating values in the workforce, enhancing productivity and profitability, and fortifying the overall posture of the organization. 

An organization's workflow is reliant upon the efficiency of its HRM functions, and the overall growth and success of the organization are dependent on the efficiency of its workforce. Hence, strategic and smart management of the organization's human capital is crucial. Today, in this article, let us learn in-depth about human resource management, its key functions, and its importance in an organization. If you are among the aspiring individuals seeking an in-depth guide to the details of breaking into an HRM job, we have curated the top HR interview questions and answers to help you prepare for your next move. 

What is human resource management? 

In simple terms, human resource management (HRM) is the effective and strategic management of human capital in an organization. HR management entails a systematic and strategic approach to managing the workforce of an enterprise, employing strategic planning, coordination, direction, and control.

The task of HR management is to streamline the roles and performance of the employees and ensure the workforce enjoys a healthy work environment and culture. Ideally, the Human Resources Management (HRM) department in any organization is a pivotal part manned by trained and qualified professionals. This department operates to ensure that the organization is driven towards its goals and achievement of success by improving the work environment and ensuring the diverse workforce functions in a unified manner in a cohesive environment.

The human capital of an organization is typically diverse in nature, with professionals coming from varied backgrounds and having varied skill sets and abilities. Putting them together in a cohesive environment and performing efficiently is the task of HR professionals. Hence, the efficiency and competency of HR professionals are vital for an organization to perform, thrive, and attain success.

Top 10 Key Functions of HRM

The Human Resource Management (HRM) department plays a vital role in an organization. Their primary functions involve recruiting, selecting, training, managing the performance of their workforce, handling their payrolls, and maintaining healthy worker relations and environments. Let us classify the top functions HRM plays in an organization.

Talent Acquisition

One of the key functions HRM performs is the hiring of talents suitable for the company's goals and profile. This function entails attracting potential talents through a strategic recruitment plan and sourcing and recruiting such talents to take up key roles in the organization. Employing an effective strategy ensures attracting the right people to the organization with the required skills, knowledge, and qualifications that will boost the company's growth and innovation. HRM's function of identifying and employing the top talents and building a dynamic and diverse workforce is, thus, indispensable.

Onboarding

This simply means the process of welcoming, inducting, and assimilating new employees into the organization. The process entails completing paperwork, providing orientation, introducing new members to the company, and outlining the company's expectations and policies for the new employees. Human resource professionals are responsible for making the new inductees feel welcome and ensuring that they are well integrated into the company's environment, culture, and work mode. 

Training Management

Another significant function of HRM is effective training management for the organization's workforce. The growth and advancements of a company can only materialize with the employee's skills and knowledge enhancements, which ultimately lead to better performance. HR managers fulfill the tasks of identifying training requirements, designing and developing training programs, and successfully organizing training sessions.

HR professionals identify the areas where their workforce requires training and ensure that they deliver effective training programs. These programs are essential for enhancing the skills and competencies of the company's human capital, which is the most vital asset. Employee training further enables better job performance, fosters higher employee engagement, keeps them loyal and has higher job satisfaction, and motivates them to perform more efficiently towards the company's goal and success.

Performance management

Another key function of HRM is the establishment of a performance management system, where HR professionals can assess and evaluate the performance of each employee in the organization. HR managers set the company's performance standards and expectations and gauge the workforce's performance to check if they meet or exceed the company's standards. This process is critical to ensuring that the employee's work is aligned with the organizational goals and objectives. The performance management system helps HR managers identify the employees' strengths and weaknesses, develop training and skills development programs, give feedback, and offer rewards and appraisals for high performers.

Workforce Relations and Engagement

Human resource management works as the clue that holds the company together. They play a critical role in maintaining a healthy environment for everyone in the organization. They foster positive relations among the employees and create a supportive work environment. HR professionals further ensure employee engagement by addressing any employee grievances, complaints, concerns, or conflicts and ensuring a fair and timely resolution. They ensure fulfilling recognition programs, encouraging work-life balance, and wellness initiatives, ultimately improving productivity through motivation and job satisfaction.

Payroll Management

Efficient management of payroll is crucial for organizations. This function is efficiently carried out by HRM. They oversee the remuneration and perks of the employees and ensure the company adheres to the payroll rules and regulations. The accuracy, efficiency, and compliance of the payroll policies are well-maintained by HR professionals. They also ensure that workers receive a fair salary, timely payment, and enough benefits are offered to the employees. Their tasks also involve the development and framing of the company's practices and policies regarding wages and salaries. They conduct salary surveys to keep track of market trends across diverse roles and devise pay scales and salary ranges in compliance with industry labor laws and regulations.

Labour Laws Compliance Management

Another key function that HRM plays in an organization is ensuring that the company functions as per the laws and regulations laid out by the local governing bodies and industry. They manage the company's compliance with employment laws and regulations and ensure that the company adheres to all relevant industry standards and employment laws and regulations. HR professionals have the responsibility of updating company policies and procedures in accordance with changes in labor laws and regulations. They do this by staying abreast of updates and changes in labor laws. Their job is to mitigate the legal risks of the organization and ensure equitable treatment of all its employees.

Career development management

This function of HRM involves taking care of the employees' growth and career development. HR professionals identify and develop prospective candidates for leadership roles in the organization. They identify and develop career development programs for the employees and provide them with resources, tools, and opportunities to grow in the company.

A conducive work environment and employee well-being

This is one critical function that is carried out by HR professionals. They ensure that the workplace practices an inclusive culture where diversity is embraced and inclusion remains the foremost enabler, enabling employees to enjoy a friendly environment. They also ensure the mental, emotional, and physical well-being of the employees and often develop wellness programs like workshops, mental and health services, workplace safety programs, etc. These initiatives further lead to the enhancement of overall performance by reducing absenteeism and improving productivity.

Exit Management:

HRM function is inevitable again in the company's professional or personnel departing from the organization. They perform all the formalities necessary for the resignation of an employee to ensure legal and ethical compliance.

Why is HRM important?

We have discussed the major functions performed by HRM in an organization. Let us dilate a few points to highlight the importance of HRM in organizations.

HRM enables monitoring and supporting employees' lifecycles at every stage.

From hiring to the retirement of employees, HRM's function in the organization is indispensable. Their job comprises all the activities involved in managing the workforce from beginning to end and covers every aspect that keeps the workforce functional and effective.

Keeping organizational costs manageable

Through their efficient management skills, HRM enables companies with strategic and efficient policies to run the organization at manageable costs. They frame well-crafted company policies, competitive salary packages and benefits, and excellent people analytics and decision-making.

Ensures a positive work culture

From fostering a positive work culture to ensuring the career development of its employees, HRM in an organization is key to ensuring the company sustains and thrives along with the positive growth of its workforce. The high employee retention, engagement, and workforce efficiency will generate growth and success for the company.

Mitigates Risks

For an organization to thrive and function, it requires adhering to numerous laws and regulations. This job is deftly carried out by HR teams. They aid companies in easily navigating the mass laws and procedures around hiring and managing people, ultimately maintaining a strong reputation for the organization.

The role and significance of HRM cannot be overstated. With massive competition throttling every organization today, thriving and excelling demands competent HR teams. Their roles were limited to the hiring and management of benefits. This, however, has undergone a paradigm shift, and now they are responsible for managing and enhancing every aspect of the organization. It takes specialized skills and qualifications to function as an HR professional in today's time.

Read Also: 

What is the Role of AI in Human Resource Management (HRM)?
What is the Future of AI in HRM? Opportunities and Challenges
The Rise of AI in HR: Reshaping the Future of Talent Management

Key Functions of HRM Why is HRM important? efficiency of its HRM functions